Tanzania - First Poverty Reduction Support Credit and Grant Project

Document of The World Bank Report No. 31021 IMPLEMENTATION COMPLETION REPORT TANZANIA FIRST POVERTY REDUCTION SUPPORT CREDIT AND GRANT (CREDIT NO. 37720) JANUARY 27, 2005 Poverty Reduction and Economic Management Unit 2 (AFTP2) Tanzania and Uganda Country Management Unit (AFCO4) Africa Region  Simplified Implementation Completion Report For Programmatic Adjustment Operations Operation ID: P074072 Operation Name: Poverty Reduction Support Credit and Grant Team Leader: Robert Utz TL Unit: AFTP2 Report Date: December 27, 2004 1. Program Data Name: Poverty Reduction Support Credit and Grant L/C Number: 37720 Country/Department: Tanzania Country Department Unit Region: Africa Sector/subsector: Central government administration (40%); Sub-national government administration (20%); General agriculture, fishing, and forestry sector (20%); Micro and SME finance (10%), Water (10%). Theme: Public expenditure, financial management, and procurement; Municipal Finance; Rural markets; Tax policy and administration; Environmental policies and institutions. KEY DATES Original Revised/Actual PCD/PR: February 13, 2003 Effective: July 18, 2003 July 18, 2003 Appraisal: February 26, 2003 MTR: Approval: May 29, 2003 Closing: June 30, 2004 June 30, 2004 Borrower/Implementing Agency: The United Republic of Tanzania, Ministry of Finance and other Ministries Other Partners: KfW STAFF Current At Appraisal Vice President: Gobind Nankani Callisto Madavo Country Director: Judy O'Connor Judy O'Connor Sector Manager: Kathie L. Krumm Fredrick Kilby Team Leader at ICR: Robert Utz Benno J. Ndulu ICR Primary Author: Alema Siddiky 2. Principal Performance Ratings (focused on this operation's contribution toward overall program objectives) (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S 2  QAG (if available) ICR Quality at Entry: S Operation at Risk at Any Time: No 3. Program Description 3.a Description of the Program 1. Tanzania launched the participatory Poverty Reduction Strategy (PRS) in 1999 with the preparation of an interim PRS followed by the approval of a full PRS in 2000. The PRS built on the 1997 National Poverty Eradication Strategy (NPES), which set out long term poverty reduction goals consistent with international development goals, and the medium term expenditure framework (MTEF), which focused on resource allocation to the priority sectors. 2. The PRS has focused on three main areas of outcomes: (i) reducing the breadth and depth of income poverty, including reducing basic needs poverty and food poverty with a particular focus on rural areas where poverty is more prevalent; (ii) improving the quality of life and social well being: this entails improving human capabilities, enhancing longevity and survival, and social well-being (social inclusion and personal security), improving nutrition, and containing extreme vulnerability (mainly through safety nets); and (iii) creating an environment conducive to development that can be sustained. The environment encompasses macroeconomic stability and good governance. 3. The first and third area entail cross-sectoral and institutional measures and the second is primarily dealt with through sector-specific interventions in areas such as health, education and water which are designated as priority sectors. As part of the PRS process the government has prepared, realigned and approved sector development programs for basic health, basic education, agriculture and water. These now provide the framework for supporting the implementation of the PRS targets that are specific to the sectors. 4. The first, second and third PRS progress reports were endorsed by the Bank's Board on November 27, 2001, May 29, 2003 and June 2, 2004, respectively. At present, the Government of Tanzania is in the final stages of preparing its second PRSP (i.e. the National Strategy for Growth and Reduction of Poverty - NSGRP). A second draft of the NSGRP was presented to stakeholders during the Poverty Policy Week in early November 2004. It covers the period (2004-2008) and builds on the achievements and lessons of implementing the first PRSP (2000-2003). 3.b. Description of the Operation 5. The implementation of the above reform program is supported by a series of Poverty Reduction Support Credits (PRSCs) and PRSC-1 is the first in a series of three single tranche operations. PRSC-1 was approved by the IDA Board on May 29, 2003. Programmatic adjustment lending was proposed under the Bank's Country Assistance Strategy (CAS) to support the implementation of policies and institutional development programs for sustainable growth and poverty reduction. PRSC-1 selectively supports the implementation of key priority areas of Tanaznia's Poverty Reduction Strategy (PRS). The key feature of the PRSC-1 operation is that it focused on cross cutting and institutional issues. In coordination with other external assistance programs, the PRSC-1 supported Tanzania's effort to scale up growth, broaden the impact of growth on reducing poverty and improve access to and quality of public services. The operation aimed to support actions to raise the 3  level of private investment, enhance competitiveness and productivity of the Tanzanian economy create an attractive environment and reduce bottlenecks in the growth of the rural economy and support cross cutting reforms in public sector management. 6. The design of the PRSC takes into account requirements for coordination and harmonization with other development partners particularly the Poverty Reduction Budget Support (PRBS) donors. The motivation for this effort derives from the clear desire of both GoT and the development partners to ensure that all operations adopt :